Is there a benefit to paper trading?

Discussion in 'Risk Management' started by rin4et, Sep 27, 2017.

  1. volpri

    volpri

    Sim trading? ROFL
     
    #51     Sep 30, 2017
    ThunderThor likes this.
  2. rin4et

    rin4et

    I use Robin Hood. I wouldn't use it to trade size but for a new trader learning to execute trades as per their strategy it is great!
     
    #52     Sep 30, 2017
  3. I have heard the name. Don't know much about them. I wonder how they make money if they dont charge commissions?
     
    #53     Sep 30, 2017
  4. Buy1Sell2

    Buy1Sell2

    Paper trading is fine for learning the logistics of trading. It will not help you with strategies etc.or trading better because there is no emotion involved. One must lose real money in the real market in order to trade successfully.
     
    #54     Sep 30, 2017
  5. wrbtrader

    wrbtrader

    Be careful...the phrase "paper trading" is kind'uv vague with some traders.

    To some it means a simulator at their broker, to some it means writing down trades on paper and to others it means typing trades into a spreadsheet. Further, there's the issue that many paper traders misuse it such as often seen in "demo accounts"...problems that will occur in real money trading that will not occur in paper trading or backtesting.

    Yet, if someone is still in the "development" phase of their trade method, they should be only backtesting and not simulator trading. Paper trading (simulator trading) while still developing a trade method can cause problems when a trader traverse into real money trading.

    Sorry, I hate the phrase paper trading because it means different things to different traders whereas the phrase simulator trading is a little more specific.

    Simulator trading should only be used to learn the broker trading platform and then simulate the trade method to see what the results are in comparison to the backtesting results. The real debate is how long should someone use a simulator prior to moving into real money trading ?

    Tough answer considering everybody is different.

    Any problems in the simulator results is most likely due to psychological problems (e.g. discipline problems to stick to the trade method) and the trader must resolve those psychological problems prior to any more simulator trading and prior to traversing into real money trading.
     
    #55     Oct 1, 2017
    murray t turtle likes this.
  6. ironchef

    ironchef

    I can support your comments.

    I have two sets of brokerage accounts, one set with a bank which allows certain numbers of free trades a year, the other set with a regular brokerage which charges xx per trade. The bank trades were slow to execute and so I often didn't get the price I wanted.

    For options, because of large bid/ask spreads and time urgency, I only use my regular brokerage account to trade.
     
    #56     Oct 1, 2017
  7. ironchef

    ironchef

    Therefore, for me, paper trading is not useful.

    For me: Developed strategy, backtested to refine and then traded small to tryout.
     
    #57     Oct 2, 2017
  8. Go for paper trading. You won’t lose money with wrong timing or bad decisions. Paper trading will allow you to evaluate all your mistakes in your analytical process which will give you the chance to develop the sound trading strategy.
     
    #58     Aug 21, 2019
    lovethetrade and Gaston like this.
  9. Gaston

    Gaston

    Thanks for the explanation.
     
    #59     Dec 26, 2019